IDEAS home Printed from
   My bibliography  Save this paper

Impact assessment of trade liberalisation between EU and Mercosur countries


  • Weissleder, Lucie M.
  • Adenauer, Marcel
  • Heckelei, Thomas


Ongoing bilateral trade negotiations between the Mercosur group and the EU since 2000 on agricultural products served as incitement to analyse the impacts of possible outcomes. The objective of this paper is to quantitatively assess impacts of bilateral liberalisation scenarios on EU25 and Mercosur markets as well as their bilateral trade flows. For this purpose, the CAPRI model, which has already been applied to several multi- and bilateral trade liberalisation scenarios in the past, has been adopted in several ways. (1) Trading blocks in CAPRI have been expanded so that the Mercosur countries are now represented with country specific behavioural functions and explicit trade flows. (2) The parameters of these behavioural functions have been calibrated using recently estimated supply and demand elasticities (CAP, E. ET AL., 2006) as prior information in a constrained Bayesian framework (HECKELEI, T. ET AL., 2005). (3) Two different baselines scenarios varying in the assumed production potential of the Mercosur countries were defined with experts from these countries. This approach reflects that developments in Mercosur countries are very dynamic with lots of uncertainties. It also provides analysis of results dependent on baselines which is an innovation in CAPRI (technically and qualitatively). In this paper three selected scenarios are analysed. The first scenario reflects an unilateral partial liberalisation between the EU25 and the Mercosur countries by allocating additional Tariff Rate Quotas (TRQs) to the Mercosur countries for certain products based on an official EU proposal (USDA, 2005). The second scenario combines the partial unilateral liberalisation with the multilateral WTO G20 proposal. Sensitive products are defined according to JEAN, S. et al. (2006). The third comprises a bilateral full liberalisation between the EU25 and the Mercosur countries by allowing quota and duty free access in both directions for all agricultural products. The results focus on welfare effects and the market balances of seven key commodities (wheat, maize, rice, soybeans, bovine meat, chicken and pork). Furthermore, a sensitivity analysis on the elasticities of substitution between foreign and domestic produced goods that drive demand of trade flows is provided and shows that the choice of those elasticities is very crucial with respect to model results.

Suggested Citation

  • Weissleder, Lucie M. & Adenauer, Marcel & Heckelei, Thomas, 2008. "Impact assessment of trade liberalisation between EU and Mercosur countries," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6667, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa107:6667

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Heckelei, Thomas & Mittelhammer, Ronald C. & Jansson, Torbjorn, 2008. "A Bayesian Alternative To Generalized Cross Entropy Solutions For Underdetermined Econometric Models," Discussion Papers 56973, University of Bonn, Institute for Food and Resource Economics.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Adenauer, Marcel, 2008. "CAPRI versus AGLINK-COSIMO: Two partial equilibrium models - Two baseline approaches," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44120, European Association of Agricultural Economists.
    2. Baer-Nawrocka, Agnieszka & Kiryluk-Dryjska, Ewa, 0. "Wpływ Likwidacji Kwot Mlecznych Na Sytuację Produkcyjną I Ekonomiczną Producentów Mleka W Unii Europejskiej (Wyniki Symulacji Modelowych)," Village and Agriculture (WieÅ› i Rolnictwo), Polish Academy of Sciences (IRWiR PAN), Institute of Rural and Agricultural Development, issue 3.
    3. Revell, Brian & Saunders, John & Saunders, Caroline, 2014. "Assessing the Environmental Impact of Liberalising Agricultural Trade – With Special Reference to EU-Mercosur," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 169728, Agricultural Economics Society.

    More about this item


    Trade liberalisation; Mercosur; CAPRI; Armington.; Demand and Price Analysis; International Relations/Trade;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eaa107:6667. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.